|Unit Corp is paying a 34% premium for PetroCorp, its Tulsa neighbor. Unit drills for clients (#5 land based driller in the US) and its own portfolio. Petro had already hi-graded its portfolio by selling Alabama and Canadian assets. |
Unit Corp. (NYSE:UNT - News) , in a move to boost its presence in the oil and gas exploration sector, Tuesday said it agreed to acquire rival energy concern PetroCorp Inc. (AMEX:PEX - News) for $190 million in cash and stock.
PetroCorp, based in Tulsa, Okla., explores and develops oil and natural gas properties primarily in Texas and Oklahoma. Unit Corp., which is also based in Tulsa, is involved in oil and gas exploration, production and contract drilling.
The proposed deal consists of two million shares of Unit Corp., with the remainder in cash. Unit Corp. expects the deal to immediately add to earnings and cash flow per share.
The acquisition is subject to conditions, including approval of PetroCorp shareholders.
Monday, shares of PetroCorp closed at $11.15 on the American Stock Exchange, and Unit Corp.'s shares closed at $20.91 on the New York Stock Exchange (News - Websites).
Unit Corp. said about $101 million of the purchase price will be allocated for working capital, $78 million to proved reserves and the remaining $11 million to undeveloped leasehold and partnership interest.